Son and Jhunjhunwala agree: Backhaul networks must be hived off from incumbents

Today at the IITCOE workshop Ashok Jhunjhunwala made a strong argument that the Indian government must hive off the backhaul networks of BSNL and have them be managed by a separate company. Interestingly Masayoshi Son, the Japanese entrepreneur has made more or less the same argument in Japan. Great minds think alike.

The government is expected shortly to unveil a scheme to loop the country with fibre-optic lines that will support internet access at up to 100 megabytes a second, ten times the speed of the technology being replaced. Mr Son argues that to guarantee fair access to this network—and thus the most efficient use of it—it should be run by an infrastructure firm hived off from NTT, owned jointly by all the telecoms operators. Instead, the government is likely to let NTT continue to run the network, but erect “Chinese walls” between those operations and the business of selling telephony and internet access. The communications ministry is uneasy with Mr Son’s plan because it eliminates incentives to build alternative infrastructure—although in practice, the chances of any other operator building a fibre-optic network to compete with NTT’s seem slim.